Container shipping firm Neptune Orient Lines (NOL) is set to join a growing list of landmark Singapore companies that have fallen into foreign hands. France's CMA CGM announced a $3.38 billion bid for the firm on Monday and its fate seems to have been sealed.
Many have lamented the loss of iconic home-grown names in recent years, with the likes of Fraser & Neave, Robinsons, Raffles Hotel and Asia Pacific Breweries all being taken over by foreign buyers. It does seem like we are putting up pieces of Singapore Inc for sale, little by little.
But the acquisition of NOL by CMA CGM, the world's third-largest carrier, may not be such a bad thing. After all, NOL has contributed substantially to the nation's progress, even to the point where it has become less of a necessity, where its sale is, in fact, a potent sign that Singapore has advanced.
NOL was set up in 1968 as Singapore's national shipping line, part of the Government's efforts to create a maritime hub and, in turn, develop the economy. Its mission was to facilitate industrial development by carrying a share of the nation's trade at fair freight rates, while maintaining its own ships to carry cargo in times of crisis.
The truth is, NOL has done Singapore proud.
It has grown from a fledgling line with just five vessels to become the world's 12th-largest container shipping player, operating around 90 vessels.
The Singapore port has also come into its own. It is the second-busiest port globally, behind Shanghai. Analysts have noted that it will continue to thrive - with or without NOL.
Simply put, there is little point in holding on to NOL as an iconic asset when its strategic significance has diminished with time. This is crucial, given that the firm, which has been bleeding financially, operates in an industry that is buffeted by slowing demand and severe overcapacity in shipping.
In both global shipping and the global economy, consolidation has become the name of the game. So perhaps this is also a sign that it is a good time to let go of NOL, and look into the future for what could be the next strategic asset.
